CAN Europe recommends using half of the auctioning revenues for international climate finance, and the other half for domestic climate finance.
Estimates of the total value of revenues from the auctioning of emissions allowances under the third phase of the EU’s Emission Trading Scheme (ETS) (2013- 2020) vary according to the carbon price forecast. With the current low price of carbon on the EU ETS (less than €7/tonne in May 2012), income for the next trading period is estimated to be around €10 billion annually1. Previous estimates based on a higher carbon price went up to a total income for the 27 EU Member States of up to €21 billion annually by 20202. In both cases it represents a significant amount of money that could be invested in sustainable green growth, which could support economic reform and investment in Europe, as well as fulfilling part of the commitment made by the EU to provide new and additional funding for climate action in developing countries. All these benefits could be achieved using auctioning revenues without any negative impact on the national budgets, while ensuring the “polluter pays” principle is upheld.